Washington woes cause mixed week for commodities

AFP, LONDON

Commodities markets were mixed this week, but Brent oil hit a one-month peak on hopes of a deal that would resolve the US budget gridlock and avoid a default that would hurt world demand for raw materials.

In contrast, gold hit a three-month low as the prospect of a US deal dampened investor demand for the safe-haven metal, dealers said.

Global stock markets jumped at the end of the week as US President Barack Obama and Republican leaders held their first talks on resolving a budget impasse.

OIL: Brent crude oil on Thursday hit a one-month peak at US$112 per barrel, propelled by hopes of a US budget deal and simmering Middle East tensions.

Markets rallied in response to a Republican proposal to offer a six-week extension of US borrowing authority, but analysts said oil markets were under pressure owing to worries about a US supply glut.

The latest US data showed a surprising build-up of 6.8 million barrels for last week, which indicated weaker demand.

Crude futures also advanced as an Israeli Army tweet seemed to suggest Israel had launched military action against Syria, but actually referred to the 40th anniversary of the Yom Kippur War.

Spiking tensions in Libya supported prices further, as Libyan Prime Minister Ali Zeidan was freed on Thursday after being held by gunmen for several hours.

Prices tailed off toward the end of the week as OPEC trimmed its oil demand predictions.

By Friday, on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month jumped to US$111.39 per barrel from US$109.06 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for next month eased to US$102.94 a barrel from US$103.53 a week earlier.

PRECIOUS METALS: Gold sank to a new three-month trough at US$1,260.60 per ounce, while silver hit the lowest level this month.

Meanwhile, platinum prices dove on Friday to US$1,362.35 per ounce — a level last seen on July 10 — on upbeat news from key producer South Africa.

Mining giant Anglo American Platinum Ltd said on Thursday that workers at its South African mines ended an almost two-week strike over job cuts after reaching a settlement.

By late on Friday on the London Bullion Market, the price of gold dropped to US$1,265.50 an ounce from US$1,309.75 a week earlier, as silver edged down to US$21.52 an ounce from US$21.65.

On the London Platinum and Palladium Market, platinum slipped to US$1,369 an ounce from US$1,386, while palladium firmed to US$712 an ounce from US$706.